UPDATE: Morgan Stanley Downgrades Newell Rubbermaid to Equal-Weight on Macro Risk

Morgan Stanley reduced its rating on Newell Rubbermaid

from Overweight to Equal-weight as looming macro risk overshadows solid report for the company's second quarter. Morgan Stanley commented, "After a solid Q2 EPS, we are downgrading NWL to EW, as we are concerned that macro risk is increasing for H2 given deterioration in European /emerging market economic indicators (that could potentially spread to the US), as well as some signs of a weakening US consumer. We believe NWL is the most discretionary company in our HPC coverage, with a strong historical relationship (65% r-squared vs. a 19% peer average) between its organic sales growth and geographic-weighted GDP growth. While valuation remains low, after significant YTD outperformance vs. S&P 500 and peers, we expect further multiple expansion to be limited due to macro concerns." Newell Rubbermaid closed at $18.09 on Friday.